Consumer Satisfaction With Complaint Handling Following a Dissatisfactory Experience With Car Repair

ABSTRACT - Perceived justice of complaint response, intentions to repurchase, and positive and negative word-of-mouth behaviour were investigated among consumers who had experienced a negative critical incident with car repair. The study showed that satisfaction with the complaint response does not completely eliminate the negative effects of a dissatisfactory experience. Although the consumers intended to continue using the firm’s services, they were also likely to say negative things about the firm to others, and they were reluctant to recommend it if asked. Half of them spread negative word-of-mouth before raising a complaint and only a few told others about a satisfactory response to the complaint. Perceived distributive justice encouraged positive word-of-mouth, while a lack of interactional justice encouraged negative word-of-mouth.

Citation:

Veronica Liljander (1999) ,"Consumer Satisfaction With Complaint Handling Following a Dissatisfactory Experience With Car Repair", in E - European Advances in Consumer Research Volume 4, eds. Bernard Dubois, Tina M. Lowrey, and L. J. Shrum, Marc Vanhuele, Provo, UT : Association for Consumer Research, Pages: 270-275.

European Advances in Consumer Research Volume 4, 1999      Pages 270-275

CONSUMER SATISFACTION WITH COMPLAINT HANDLING FOLLOWING A DISSATISFACTORY EXPERIENCE WITH CAR REPAIR

Veronica Liljander, Swedish School of Economics and Business Administration, Finland

ABSTRACT -

Perceived justice of complaint response, intentions to repurchase, and positive and negative word-of-mouth behaviour were investigated among consumers who had experienced a negative critical incident with car repair. The study showed that satisfaction with the complaint response does not completely eliminate the negative effects of a dissatisfactory experience. Although the consumers intended to continue using the firm’s services, they were also likely to say negative things about the firm to others, and they were reluctant to recommend it if asked. Half of them spread negative word-of-mouth before raising a complaint and only a few told others about a satisfactory response to the complaint. Perceived distributive justice encouraged positive word-of-mouth, while a lack of interactional justice encouraged negative word-of-mouth.

INTRODUCTION

Research on services, and above all on consumer-perceived service quality, has developed steadfastly during the last two decades. There is no lack of empirical research on consumer perceptions of dimensions of service quality or of the importance of high quality for the consumer’s future responses to a firm. The positive effect of very satisfied or delighted consumers on repeat purchase behaviour has been demonstrated for both goods and services (Oliver, Rust and Varki 1997). However, far less attention has been paid to the consequences of consumer dissatisfaction with services. According to Singh (1990, p.1), research on service dissatisfaction 'is a relatively neglected area’, despite it having been shown that 'services entail far greater customer dissatisfaction than products’. To some extent, service failure and consequent recovery (Bitner, Booms and Tetreault 1990; Johnston 1995; Kelley, Hoffman and Davis 1993), or switching behaviour (Roos 1999), have been investigated, but less attention has been paid to factors that instigate or hinder service complaints, consumer reactions to complaint handling and its effect on future behaviour. According to Dellande (1995, p. 36), there is a "striking gap in the literature pertaining to redress in relation to dissatisfying consumption experiences involving services."

A study on dissatisfaction with goods (Richins 1987) showed that the three dissatisfaction responses, complaints, negative word-of-mouth and intentions to switch brands, were independent constructs and differently influenced by problem characteristics, personal characteristics and the redress environment. These, and other factors, such as attitude towards complaining, consumer attributions and the likelihood of success have been found to affect different consumer responses both directly and indirectly, through perceived justice of the company’s redress efforts (Blodgett, Hill and Tax 1997; Tax, Brown and Chandrashekaran 1998). These effects may vary for different services and responses (Wright et al. 1996).

This paper presents data from an empirical study on consumer complaining behaviour related to car repair services. The analyses are limited to the consumers who voiced a complaint to the repair shop. The purpose is to investigate the effect of consumer perceptions of perceived justice on repurchase and word-of-mouth behaviour.

Firstly, propositions regarding the effect of satisfaction with complaint handling on different consumer responses is outlined. The empirical study is then described and the data analysed. A short discussion follows.

PERCEIVED SERVICE REDRESS, WORD-OF-MOUTH AND REPURCHASE INTENTIONS

For a firm to be able to redress a dissatisfactory experience, the consumer has to inform it that he/she was not completely satisfied with the service. However, not all consumers voice their complaints, and many are dissatisfied with the response that they get if they do (Andreasen and Best 1977). Studies on critical incidents have shown that both successful and failed service recoveries are remembered by consumers (Bitner et al. 1990; Johnston 1995).

Dissatisfaction with the handling of complaints has been found to vary considerably for different services (Andreasen and Best 1977; Berry and Parasuraman 1991). Companies should avoid the negative consequences of failing the consumer twice: first the initial service failure, then the added aggravation of a failed recovery. In a study on customers who had completely or partly switched supermarkets, Roos (1999) found that some of the loyal customers tried to solve problems by informing the personnel about their dissatisfaction, and only switched when no improvements were made. Dissatisfied customers whose problems are not addressed are likel to use the company’s services less, to boycott a specific product or everything offered by the company, or to warn off other consumers (Fornell and Wernerfelt 1987). A study by Tax and Chandrashekaran (1992) showed that, of the subjects who were presented with the same dissatisfactory experience, those who were presented with a 'no complaint handling’ condition were more likely to repurchase than those whose complaints were handled poorly. Satisfaction with complaint handling is believed to be positively related to repurchase intentions (Gilly and Gelb 1982). On the other hand, a dissatisfied consumer may still use some of the firm’s services, for instance, having the oil and oil filter changed at a garage but will go elsewhere for major repairs.

The higher the satisfaction with redress that consumers perceive, the more likely they are to repurchase (Gilly and Gelb 1982). Consumers have been shown to evaluate satisfaction with complaint handling in terms of interactional, procedural and distributive justice (Tax, Brown and Chandrashekaran 1998). Studies on a variety of services have shown that both process and outcome aspects of complaint handling have an effect on consumers’ future behaviour towards the firm (Andreassen 1997; Blodgett, Granbois and Walters 1993; Tax et al. 1998; Wright et al. 1996). However, the effects have not been stable over different settings. For instance, Blodget et al. (1993) found a direct effect of overall perceived justice on repurchase and negative word-of-mouth behaviour (returning a good to a retailer), while Wright et al. found an effect only for repurchases (educational service). Using an experimental design Blodgett et. al (1997) found that procedural justice had no effect on repatronage or negative word-of-mouth intentions, and that high interactive justice seemed to compensate for lower distributive justice. This was interpreted as supporting the importance of the process dimension in service encounters. Another explanation for the small effect of distributive justice may be low perceived monetary loss (Gilly and Gelb 1982).

Word-of-mouth may be an alternative to voicing a complaint to the firm (Richins 1983), but it can also be used as a complementary action (Singh and Pandya 1991). In contrast to earlier beliefs of a linear relationship between word-of-mouth and satisfaction, Anderson (1998) and S÷derlund (1998) showed that the relationship is assymetrical and U-shaped. There were only negligible differences between the amount of word-of-mouth that was spread by very dissatisfied and very satisfied customers.

Richins (1987) found that negative word-of-mouth was related mainly to social activity, but also to problem severity and external attributions. A critical incident study by Sundaram, Mitra and Webster (1998) revealed that negative word-of-mouth can be categorised into four groups: 'altruism’ (prevent others from making the same mistake, 'anxiety reduction’ (vent anger), 'vengeance’ and 'seeking advice’ (c.f. St° and Glefjell 1990). All four types of communication are connected to dissatisfactory experiences and may harm the company. Often only negative of word-of-mouth is included in complaint studies because of its potential detrimental effect on other consumers’ buying behaviour, but consumer satisfaction with complaint handling may also lead to positive word-of-mouth (Tax and Chandrashekaran 1992). Consumers who are dissatisfied with the response may still say some positive things about the firm, and consumers who are satisfied may tell others about their initial dissatisfactory experience (Dellande 1995). Bases on these thoughts, the first proposition includes justice and consumer responses.

P1a: Overall perceived justice with the firm’s redress is positively related to repurchase intentions and positive word-of-mouth, and inversely to negative word-of-mouth.

P1b: Perceived interactional justice with redress has a greater effect on behaviour than procedural or distributive justice.

The notion of initial and final satisfaction (Andreasen 1977) could also be applied to word-of-mouth. Initial word-of-mouth is spread after the first evaluation of the service and before complaining, while final word-of-mouth occurs after the response. St° and Glefjell (1990) also depict word-of-mouth at different stages of the complaint process but do not indicate whether it excludes other action or is complementary. This leads to proposition two.

P2: Consumers spread negative word-of-mouth to others before the complaint is addressed by the company.

According to Singh and Widing (1991), there is little empirical support suggesting that an initial level of dissatisfaction affects consumer complaint responses. Halstead and Page (1992), however, investigated the joint effects of consumers’ original satisfaction when buying a carpet, and their satisfaction with complaint responses, on behavioural intentions. They found that the initially satisfied non-complainers had the highest repurchase intentions, but not significantly higher than for the initially satisfied consumers, who were also satisfied with the complaint response. Both groups had higher means than the initially dissatisfied who complained and were satisfied with the response. The results suggest that, in order to understand the behavioural consequences of consumer-perceived dis/satisfaction with a complaint response, information is also needed on consumer satisfaction before making the complaint. Proposition three follows form this.

P3: Consumers who are satisfied both prior to making a complaint and with the redress are more likely to engage in positive behaviour towards the firm, than consumers who are initially dissatisfied but satisfied with the complaint response.

STUDY

Car repair was chosen for the empirical study because it is a service where consumers often experience problems. Andreasen and Best (1977) found the highest consumer dissatisfaction with this service, and a study by Huefner and Hunt (1992) showed that department stores, restaurants, grocery stores and car-related services accounted for 81% of consumer avoidance behaviour. Antecedents of complaints regarding car repair have been investigated by Bearden and Teel (1983) and Singh (1990), for instance.

The data were collected by students as part of a master’s-level course on research methods at the Swedish School of Economics and Business Administration in Helsinki, Finland in February-March 1998. The students were asked to find consumers who had had a recent dissatisfactory experience with a car repair shop. The respondents were interviewed using a structured questionnaire, and 195 interviews were conducted. The consumers are not separated by type of complaint in the analyses.

The complaining process in Finland is similar to that described by St° and Glefjell (1990) for Norway. Only complaints made directly to the service provider are included in the present analyses.

Measures

The questionnaire included measures of several known correlates of complaining behaviour (e.g. attributions and attitude towards complaining). However, only questions pertaining to perceived satisfaction with the repair shop, complaint handling, word-of-mouth behaviour and other behavioural intentions is investigated here.

Satisfaction with the repair shop. Consumers were asked how satisfid they were with the car repair shop as a whole before the critical incident occurred, and how satisfied they were with the repair shop at the time of the interview, if they still used it (7-point satisfaction scales with the end-points very dissatisfiedBvery satisfied).

Satisfaction with responses to complaints. Consumers who had complained to the workshop were asked how they had perceived the response to their complaint. Six statements, based mainly on Blodgett (1994), measuring interactional, procedural and distributive justice, were presented on 5-point scales (completely disagree/agree): 'The personnel was very courteous and helpful’, 'I was very dissatisfied with how the personnel responded to my complaint’ (reverse coded), 'As a whole, the personnel handled my complaint fairly’, 'I got a quick answer to my complaint’, 'I got the compensation that I asked for’ and 'The compensation was sufficient’.

Word-of-mouth. Three different measures for word-of-mouth were used at different points in the questionnaire. Firstly, the consumers were asked if they had said negative things about the repair shop to others before they made their complaint to the firm (yes/no). Secondly, consumers were asked if they had told negative (yes/no) or positive things (yes/no) to others about the response to their complaint. Thirdly, the likelihood of the consumers saying positive or negative things about the mechanic or repair shop to others (4 scales), and recommending them if asked, were measured on 5-point scales ranging from very unlikely to very likely.

Intentions to repurchase. The following four statements were given: 'I will continue to use this repair shop’s services as before’, 'I may consider using some of this repair shop’s services’, 'Because of what happened I will never again use any of their services’ (reverse scored) and 'I would consider using other repair shops in the same chain (if there are others)’. All the statements were measured on 5-point scales with the end-points completely disagree/agree.

Description of the data

The 122 consumers who complained directly to the workshop and had received a response to their complaint at the time of the interview were used in the analyses. Most of them (86 %) complained to only one person at the repair shop. Fourteen complained to two persons, and three complained to a mechanic, a superior and someone else. Only 13 consumers wrote a letter of complaint. Respondent ages varied between 21 and 75 (mean 33), and the majority (59%) were male. Most of the cars in question were owned by the respondents (65%), or their families (24%). Half of the complainers had used an authorised brand repair shop, while the other half had used either an independent repair shop or one attached to a petrol station. Of all the complainers, 70% had used the repair shop twice or less.

The mean importance rating for the service was 4.1 for the complainers and 4.0 for the whole sample. Only 7% were certain that they would have been able to do the repair themselves. Thus the service was important to the consumers.

The internal consistency of the measures was analysed using exploratory factor analysis and reliability statistics (coefficient alpha). All the items concerning perceived justice, repurchase intentions and likelihood of word-of-mouth and recommendation behaviour were factor analysed together and separately. When the three concepts were analysed together four factors were extracted which explained 73% of the variance in the data: 1) perceived justice (JUST, a=.89) which contained all the justice items except the response time, 2) positive word-of-mouth (PWOM, a=.90) including positive word-of-mouth and recommendation behaviour, 3) repurchase intentions (BUY, a=.85) including all four items, and 4) negative word-of-mouth (NWOM, a=.89) with two items. When the six items concerning perceived justice were analysed separately, three factors emerged that together explained 88% of the variance: 1) intractive justice including all three variables that referred to the personnel (a=.86), 2) procedural justice with only 'response time’, and 3) distributive justice with the two compensation items (a=.94). Averages were computed for each factor, and these were used in the further analyses. Since 'timeliness of response’ had a low item-to-total correlation with the other justice items, it was not included in the overall measure of satisfaction with complaint response (JUST).

FINDINGS

The results are presented in the following order: firstly, negative word-of-mouth expressed before complaining and word-of-mouth about the consequent complaint response are presented; secondly, customer responses at different levels of satisfaction with the redress are looked into; and thirdly, initial satisfaction is introduced into the analysis.

Word-of-mouth before voicing complaint

About half of the consumers (48%) had said negative things about the repair shop prior to complaining, thus supporting P2. This emphasises the importance of performing the service correctly the first time. Even if the consumer is compensated later for the failure, he/she may already have damaged the image of the firm by telling others about the bad experience. Consumers may not communicate the good news of the service recovery to the same person(s) who were first told the bad news. In the present study, 39% of the consumers who spread negative word-of-mouth before receiving a response were later satisfied with the recovery.

Word-of-mouth about the firm’s response to a complaint

The consumers were first grouped according to their dissatisfaction or satisfaction with the handling of the complaint (JUST). Consumers with a mean below the total mean of 3.1 were classified as dissatisfied (58), and the others as satisfied (64). Fifty-one of the 58 dissatisfied consumers had told others about their dissatisfaction, and five of the 51 also had something positive to say about the response, four consumers had only said positive things, and three had not told anyone about the response. On the other hand, only 33 of the 64 who were satisfied had told the good news to others. Seventeen of the satisfied consumers had said negative things about the response to others (of which 9 said only negative), which can be explained by the fact that not all of them were completely satisfied. In other words, the consumers who were dissatisfied with the response were more likely to tell others about their dissatisfaction than the satisfied ones were to tell others about the successful service recovery. This supports the theory that consumers are more likely to spread negative than positive word-of-mouth (Richins 1983).

Perceived justice of redress, repurchase intentions and word-of-mouth

Four groups were created according to the varying levels of response satisfaction (JUST): very dissatisfied (1.0B2.0), somewhat dissatisfied (2.1B3.0), 3), somewhat satisfied (3.1B4.0) and very satisfied (4.1 -5.0). The effect of response satisfaction on BUY, PWOM and NWOM were then analysed using one-way analysis of variance. The results are reported in Table 1. There was an effect of the level of satisfaction on behavioural intentions in the proposed direction (P1a). All models were highly significant.

Independent t-tests were performed for each pair of satisfaction levels. Only the means of 'somewhat dissatisfied’ and 'somewhat satisfied’ did not differ for any of the consumer responses. Paired-samples t-tests revealed that the means for BUY and PWOM were significantly different at p<0.001.

Some onclusions may be drawn from the analyses. Low levels of perceived justice of redress are related to a high likelihood of not using the same service in the future and spreading negative word-of-mouth. High levels of perceived justice have the opposite effect. Moderate levels of perceived justice have very similar effects on consumer responses. Thus support for P1a was found regarding very high and very low levels of perceived justice. Moreover, there was evidence of a non-linear relationship between dissatisfaction intensity and consumer responses, as suggested by Singh and Pandya (1991). A rise in dissatisfaction or satisfaction with the response will not affect behaviour unless a certain threshold is exceeded. It is also noteworthy that, even if both the very dissatisfied and the very satisfied consumers are likely to engage in word-of-mouth, the means for negative word-of-mouth are somewhat higher. Good recovery from a dissatisfactory experience will not completely abolish negative communication about the service provider. There is a higher likelihood that the consumer will continue using the service in the future, than that he/she will spread positive word-of-mouth to others about the firm. Service recovery seems to have a greater effect on loyalty in terms of intended buying behaviour than in terms of intended positive word-of-mouth.

Five consumer responses, BUY, PWOM, NWOM, and negative and positive communication about the response (dummy variables) were then regressed on perceived interactional, procedural and distributive justice. The results showed that PWOM and positive communication about the response were positively affected only by distributive justice (b=.404 and .484 respectively). The better the compensation was, the more likely the consumers were to say positive things to others about the firm, and about the complaint response (Adj. R²⁼.29 and .23). All three justice components had a negative effect on negative communication about the complaint response (Adj. R²⁼.40), while only interactional justice affected negative word-of-mouth about the firm (b=-.382, Adj. R²⁼.21). BUY was positively affected by both interactional (b=.307) and distributive (b=.306) justice (Adj. R²⁼.36). Contrary to P1b, these findings indicate that perceived interactional and procedural justice may have different effects on consumers’ positive and negative behaviour towards the firm. Lack of interactional justice provokes the customer into spreading negative word-of-mouth about the firm in general, while good distributive justice motivates him or her to recommend the firm. Lack of all three types of justice encourages the customer to tell others about the negative response that he/she received when complaining.

TABLE

CONSUMER SATISFACTION/DISSATISFACTION WITH COMPLAINT RESPONSE AND BEHAVIOURAL INTENTIONS TOWARDS THE FIRM

Initial satisfaction, redress satisfaction and consumer responses

Some consumers expressed satisfaction with the firm before the incident happened, even if they had not used it before. Their experience was in making an appointment and interacting with various parts of the firm in connection with taking delivery of the car. Consumers were not separated according to previous usage.

The consumers were into two groups according to their initial satisfaction level (satisfied/dissatisfied). Only two groups were created to maximise the number of respondents in each cell Those who had marked four or less on the 7-point scale were categorised as dissatisfied, all others as satisfied. These two groups were further divided into two, according to their satisfaction with the complaint handling. Consumers with a mean score below the total mean of 3.1 were classified as dissatisfied, the others as satisfied. Of those who were dissatisfied with the complaint response, 19 were also dissatisfied before the incident, while 22 had been satisfied. Of those who were later satisfied with the redress, only eight had been dissatisfied initially, while 36 had been satisfied. This limits the conclusions that can be drawn from the analyses and the data cannot be fully compared with that in Halstead and Page (1992), who found that initially satisfied conumers who were also satisfied with the complaint response were more likely to repurchase than the initially dissatisfied ones who were satisfied with the response. The means for BUY, PWOM and NWOM were computed for the present data to explore the difference, but no differences were found between the two groups. This means that P3 could not be confirmed. The initially satisfied consumers who were also satisfied with the firm’s redress had significantly higher means for BUY and PWOM, and a lower mean for NWOM, than both the initially satisfied who were dissatisfied with the redress, and those whom the firm had failed twice, who were both initially dissatisfied and dissatisfied with the redress.

The variables BUY, PWOM and NWOM were also regressed on overall perceived justice (JUST) and initial satisfaction, and on JUST together with a disconfirmation measure in which initial satisfaction was subtracted from final satisfaction with the firm. Initial satisfaction only added slightly to the explanation of repurchase intentions. The more satisfied the consumers were initially (b=.186, p<0.05), and the better they perceived the justice of redress (b=.579), the more likely they were to return to the repair shop (Adj. R²=0.43). Satisfaction disconfirmation, on the other hand, only affected negative word-of-mouth. Lower perceived justice (b=-.434) and negative disconfirmation of satisfaction (final satisfaction lower than initial satisfaction, b=-.271) led to a higher likelihood of spreading negative word-of-mouth (Adj. R²=0.32). Thus, initial satisfaction, in combination with perceived justice, seems to affect consumer loyalty in terms of buying behaviour, but not word-of-mouth. However, the more initial satisfaction exceeds final satisfaction, in combination with redress dissatisfaction, the more likely consumers are to warn off others.

DISCUSSION

These results highlight the importance of satisfying a complaining customer if the firm wants to avoid negative word-of-mouth and encourage repeat purchases. However, the data also showed that even consumers who are fairly or very satisfied with the response to their complaints are not wholeheartedly committed to using the firm’s services in the future. They are even less likely to recommend the firm, and they are still likely to spread negative word-of-mouth. The dissatisfactory experience is not completely left behind and forgotten, and "what has been done cannot be undone" (Dellande 1995, p. 36). Even when the problem is corrected, the consumer may have lost precious time waiting for the car to be repaired for the second time. If the consumer is well compensated, he/she is likely to spread positive word-of-mouth, but if the personnel is rude or otherwise perceived as behaving unfairly, negative word-of-mouth will be spread. A consumer may also remain temporally loyal (Davidow and Dacin 1997) while looking for alternative providers.

A limitation of the study was that intervening variables such as the severity of the problem and/or monetary loss were not taken into account. Consumers may also react differently depending on whether the initial problem was a faulty spare part or the mechanic’s inability to repair the car, for instance. Moreover, the small number of respondents in some categories limits the conclusions that can be drawn from the sample.

Nevertheless, some interesting results were obtained concerning the whole sample of complainers. It seems that consumers of this service spread negative word-of-mouth before complaining, and they are more likely to spread negative word-of-mouth about a dissatisfactory response than positive word-of-mouth about a well-handled complaint. To these can be added all those who only spread negative word-of-mouth and never tell the firm about their dissatisfaction. This initial word-of-mouth behaviour is worth noting. In general, there seems to be more research on the antecedents of public thn private complaints (or compliments). Morel, Poiesz and Wilke (1997) discuss consumers’ motivation, capacity and opportunity to complain about a product. Future research could also profitably look into the effect of these on word-of-mouth behaviour for different kinds of services. Some work in this direction already exists, such as Sundaram et al. (1998) on motivation and Richins’ (1987) social activity (opportunity).

Roos (1999) found that consumers who had a longer relationship with the service provider also had a longer switching process. In the present study, most of the complaining consumers had very little previous experience with the repair shop. It is possible that consumers use different repair shops for different purposes, and they may have another shop that they use more often and have been satisfied with. Different types of behaviour may be found towards repair shops that are used regularly, or for more extensive repairs, than for those which are used only occasionally. A larger study of consumers with relationships of different lengths with repair shops could reveal how tolerant regular customers are compared to occasional customers.

It is important that consumers who are not completely satisfied with a firm’s services inform the company about its shortcomings. This way the firm receives important information about how it could improve its services. There is no denying the costs of bad quality for the company, not only in terms of immediate monetary loss when dissatisfied consumers exit, or the costs of redress, but also those arising from the negative impact on the atmosphere among employees if they have to deal with continuously dissatisfied consumers. The costs of regain management should also be considered, since these may exceed the consumer’s life-time value to the firm (Stauss 1997). Therefore, it should be remembered that complaint management is not an alternative to satisfying the consumer in the first place.

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